What is telematics and how is it used?

Vehicle telematics is the use of communications and information technology to transmit driving and vehicle information. This information can be sent to your insurance company and even used to provide you a discount.

What is automotive telematics?

Auto telematics is a method of connecting to a vehicle through a combination of cellular, GPS and on-board diagnostics. While not all programs gather and provide the same information, telematics can gather and transmit data like:

• Location - This data may be communicated with police and other emergency responders in the event of a crash, or a tow truck driver if you’re in an unfamiliar location. It can also be used to help determine driving habits like speed, fast acceleration and hard braking.
• Distance traveled - Along with other information like speed, braking or turning, the distance a vehicle travels could be used by your insurance company to help determine if you qualify for discounts on your insurance policy.
• Vehicle performance - A mechanic or technician can review the information to possibly help identify an issue with the vehicle more efficiently.

Why should I consider sharing data through telematics?

It’s important to remember that auto telematics communication goes both ways, so data can also be received, which adds to its benefits:

• Roadside assistance - If you have an emergency, need directions, or just want to make reservations at a nearby restaurant, telematics systems connect you to the appropriate live support. Sometimes in the case of a crash, a monitoring service who dispatches emergency vehicles could be alerted immediately.
• Convenience - Many telematics systems offer access to email, weather, traffic reports, stock quotes and even social media.
• Safety - Newer telematic systems can locate or track a car with GPS — whether it's stolen or you just can't remember where you parked. Some systems can remotely lock and unlock doors as well as allow you to start your car remotely with your smart phone. You may also have safe-driving insights available to you so you can better learn how to fine-tune your driving skills to help prevent collisions.
• Discounts - Insurance companies can use telematics information to reward your driving. At State Farm®, Drive Safe & Save® collects basic information about your driving characteristics. Depending on the type of vehicle you drive, this information may be sent directly from the vehicle, or from a mobile app. The safer you drive, the more you could save on your auto insurance. With Drive Save & Save you get an initial discount just for enrolling, and from there, you could save up to 30%¹ based on how you drive.
• Preventive maintenance - Your vehicle’s telematics information can provide you with the current “health” or condition of your car. This information helps avoid breakdowns by allowing preventive maintenance by service technicians.

Automotive telematics and insurance

Insurance companies use telematics to obtain information from an insured's vehicle. Information may be sent directly from the vehicle, from an external device connected to the vehicle, or from a mobile app. One of the biggest benefits with insurance companies using telematics is that it may offer insureds a discount on their premiums when you practice safe driving.

Check out this State Farm Drive Safe & Save overview.

What automotive telematics system is right for you?

You can choose from several features for an auto telematics system from multiple providers. To help determine which is right for you, ask yourself what you'll benefit from the most. Keep in mind: Some systems come pre-installed and are activated at no charge after a new vehicle purchase, but a monthly or annual subscription charge may apply beyond the trial period. Other systems can be added with little or no installation. For example:

• If saving on your car insurance premium is a priority, check with your insurance company to see if they have an auto telematics program and what equipment might be needed. Drive Safe & Save from State Farm puts you in the driver’s seat of your auto insurance. Depending on the type of vehicle you drive, you can choose to participate using a mobile app or sending information directly from your vehicle.
• If understanding the condition of your vehicle is your concern, check with your mechanic or dealership to see what they would recommend.

How can safe driving telematics tools help me?

• Digital driving tools can tell you far more than the location of the nearest gas station. In fact, driving apps can help you learn from metrics about your own driving. The goal is to help make the road safer by showing you unsafe conditions to help reduce the chance of a collision.
• Even if you're driving at a steady pace with no interruptions, digital driving apps are hard at work in the background — and that's a good thing. You'll have access to information about your driving behaviors during that trip. That helps you learn when and where you might be more at risk. Some driving behaviors, like hard braking, can increase your chances of an accident.
• Most of us drive and never really think twice about it. But what if we learned from each trip? Digital data can arm you with relevant feedback and tips on how you can improve your driving. By swapping generic safe driving information for tips tailored to your specific driving behaviors and routes, it's easier to make changes the next time you're behind the wheel. For example, understanding your own tendency to go slightly over the speed limit in your neighborhood can make it easier to correct this weak spot.
• Safe driving apps can change your smartphone habits. Using a smartphone in any way while driving is dangerous. Digital apps can help you realize if you’re using your phone, so you're able to work harder at keeping your phone out of reach and out of use while you're on the road.
• Some safe driving apps will provide you with scores and ratings or rankings based on your driving. This is typically measured using your safe or unsafe behaviors. You can try to keep track of your scores over time to compete against yourself or others to drive the most safely.

Check with your agent today to see if automotive telematics is available.